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A Week When All Hell Broke Loose With Deepfakes

Author

Frank McKenna
January 30, 2024

Howdy FrankonFraud Friends,

It finally happened. Deepfakes went mainstream, and they were all over the news.

This week’s top fraud reads 👇️ 

Let’s dig into the top stories.

11 Frauds And Scams That Will Be SuperCharged With AI ⚡️ 

AI will create new and better versions of existing frauds and scams, but it will also result in some shocking new ones that we never thought might happen.

I created this handy infographic of 11 frauds and scams that AI will supercharge.

11 Frauds and Scams That Will Be SuperCharged With AI ⚡

AI will create new and better versions of existing frauds and scams, but it will also result in some shocking new ones that we never thought might happen.

TikTok Company Creates Instant Voice Cloning AI Sparks Fraud Concerns

Imagine having a live conversation conference call on the phone with your CEO and your friend Julie in the accounting department. He verbally approves a wire transfer of $1 million to a new vendor, and you are the second verbal approval needed for Julie to send it.

Except it wasn't your CEO, and it was your friend Julie; you got deep faked by a new generation of instant AI voice cloning software called “StreamVoice” that could be released soon by TikTok parent ByteDance.

ByteDance Instant AI Voice Clone Sparks Fraud Concerns

Researchers have finally cracked the code on voice cloning in real-time. It has arrived. Deepfake conversations will now become a reality.

Visa Wants To Fight Payment Fraud With Doppelganger Profiles

This is an interesting tech advancement in cardholder profiling that Visa is patenting.

For those who have used fraud detection software like Falcon, you know that it can take up to 30 days of spending history to develop a cardholder profile. Those profiles help distinguish a typical cardholder charge from a fraudulent charge.

So what happens when the account is too new and has no history? Well, Visa is patenting a “Doppelganger” profile to pair new cardholder accounts with twins they have seen in the data. Visa’s method takes “feature data” from a new customer’s profile, such as age, gender, credit rating, region, or occupation, and matches your account to a similar standard profile twin.

This approach isn’t necessarily completely new, but we’ll see if Visa is granted the doppelganger profiling approach for payment cards.

Fighting Payment Fraud With Doppelgangers

The tech could help financial institutions find cyber criminals and figure out their spending habits early.

Alloy Fraud Report - Bust Out Tops List Of Most Damaging and Frequent Fraud

Four hundred fifty fraud decision-makers have spoken.

Their insights were captured in Alloys' whopping 46-page 2024 State of Fraud Report, which dropped this week. It’s a treasure chest of insights. 🔥 

One that caught my eye 👉️ Bust Out Fraud is listed as the single most damaging fraud in the US, both in frequency and loss to organizations.

Personally, I have seen a massive increase in Bust-Out occurrences over the 6 months across organizations. As companies get tougher, fraudsters are resorting to maxing out the accounts they do have access to.

More surprising than Bust Out topping the list of worst frauds is that there doesn’t seem to be much investment or innovation to help curtail it.

DeepFake Hell - ElevenLabs And Microsoft Are Unwitting Enablers In New Scams

In one week, deepfakes have seemingly gone ballistic, and Microsoft and an AI startup were cited as enablers by experts.

It started on Monday with the Joe Biden RoboCall deepfake urging voters not to vote. Biocatch researchers determined that a deepfake clone was created on Elevenlabs. That, by the way, was the same cloning software I used to create this voice clone that had everyone fooled.

Elevenlabs sample voice clone of me 👇️ 

ElevenLabs traced the deepfake to a specific user and suspended their account. The company allows users to create voice clones of public figures like President Biden; however, it says it can only be done to “express humor or mockery in a way that it is clear to the listener that what they are hearing is a parody.”

That was Monday. By Tuesday, another high-profile deepfake was going viral. Millions of people were coming across realistic and sexually explicit images of Taylor Swift.

The deepfake-detecting group Reality Defender said it tracked a deluge of nonconsensual pornographic material depicting Swift, particularly on Twitter. Many of the photos appeared on Meta platforms as well. At one point the images were viewed 45 million times!

And get this, 404 Media found that Microsoft’s AI Image Generator called Designer was used to create the offensive deepfakes.

Microsoft has since closed the loophole that allowed the deep fakes to be created and Microsoft CEO commented on the matter here. 👇️ 

Talk about legitimate AI solutions being used for nefarious purposes. Sure it is against these company’s terms of service, but scammers could care less!

God Told Pastor To Open A Crypto Platform, Steal Money, and Remodel His House

God really must have wanted Pastor Eligio Regalado and his wife to get caught in some hardcore fraud.

According to Regaldo, God came to him in a dream and told him to sell worthless crypto that could not be cashed. As if that was not enough, God then told him to take $1.3 million in funds and remodel his house.

He and his wife now face civil charges. They now claim that God (the one responsible for this whole mess, apparently) will work a miracle and get everyone their money back.

Pastor Said God Told Him to Steal $1.3 Million

In a civil action, prosecutors in Colorado said that a Denver pastor and his wife created and sold a cryptocurrency that was “practically worthless” and then pocketed more than $1 million.

$1.9 Billion Scam HyperVerse Was a Fraud With A Fake CEO

The DOJ charged 3 Kingpins yesterday involved in the massive HyperVerse Crypto Ponzi scam that pilfered over $1.9 Billion from victims all over the world.

It turns out they propped up the scam company with a completely fabricated CEO named Steven Reece Lewis. It turns out the fake CEO is actually a guy named Steve Harrison, and this YouTuber exposed the whole thing here. 👇️ 

Scammers Resorting To Using Couriers To Collect Money From Victims

As banks get better at helping stop victims from getting their accounts drained, scammers are resorting to using couriers to collect the money from them in person.

The FBI reports that there has been a surge of reports regarding criminals using couriers to collect cash or precious metals like gold or silver from victims (many senior citizens) whom the scammers instructed to sell their valuables.

Hero Fraud Fighting Bank Teller Saves Couples' Life Savings

She stood her ground and never waivered, and in the end, Erin Bugg, a teller with NAB Bank, saved an elderly couple $40,000.

The couple insisted that they were dealing with a reputable investment firm and requested that she wire the money immediately. After she investigated the company and consulted the fraud department, she refused to do it.

After further review, it was indeed found to be a scam. What a hero!

Nathalia Grace Re-aging - Was It A Disability Fraud Scheme By Parents?

Natalia Grace is a Ukrainian-born American with dwarfism who was adopted by an American family but abandoned by them two years later. Her adoptive parents claimed she was not a child and successfully sought a court to re-age her from a 9-year-old girl to a 22-year-old adult.

It was the subject of a stunning 2 Part Documentary by HBO called “The Curious Case of Nathalia Grace.

Now one Redditor thinks they have uncovered one possible reason behind the bizarre re-aging of this adopted orphan girl - Disability Fraud.

Natalia's disability income- benefits fraud!

Redditor speculates on what drove parents to re-age her

BitConned Star Reveals How He Started Fraud Career With This Venmo Exploit 👇️ 

Thanks for staying informed with me on new trends in fraud.

I greatly appreciate you reading this, and if you want to share the Newsletter with your friends, send them here!

Thank you, all my fraud-fighting friends!